The Gross Report

Heartland Cities in Focus

Tuesday, August 29, 2006

Cul-de-sac Nation

An affair with urban policy has a nice write-up on a recent NYTimes article about growing opposition to cul-de-sacs. Like a lot of urban planning enthusiasts, I found the article intriguing; having posted a short comment on Zach's site, I think it's worthwhile to follow up with a more thorough explanation of why cul-de-sacs are not true public spaces.

First of all, let's review (1) the basics of what constitutes a cul-de-sac and (2) why a misguided urban planner might mistake it for a public space. A cul-de-sac is a dead-end road, widened into a circular shape, with houses ringing that shape. You can usually cram a half-dozen or so houses onto a cul-de-sac. From a potential home-buyer's perspective, it offers a number of advantages: increased yard space (because of the wedge-shaped properties), slower-moving traffic (which makes it safer for your kids to play), privacy (only a half-dozen houses on the block!), and a vague yet non-encumbering sense of community (a half-dozen houses constitutes a community!?). Real estate developers love cul-de-sacs; houses sell for more and their brochures can include pictures of happy kids skate-boarding and making elaborate chalk drawings in the cul-de-sac itself.

So, why might an urban planner mistakenly categorize a cul-de-sac as a public space? This bizarre misbegotten spawn of irrational thinking could arise by focusing on one necessary (but not sufficient) aspect of a public space: visibility. In a public space, actors are visible to other actors. For instance, consider a shopping mall or, better yet, the front steps of a county courthouse. People in these two places, both in passing through these places and conducting business, see each other. Because of the layout of these places, it is impossible not to be seen. (For contrast, consider the world of Internet commerce, where millions of consumers come and go without ever having to leave their home or come face-to-face with their fellow shoppers). The quintessential public space was the Greek agora (or its modern equivalent, the New England town meeting), where citizens met to discuss politics. A cul-de-sac does indeed resemble a public place insofar as residents of the cul-de-sac itself are exposed to (otherwise put: can be seen by) their neighbors. That is, a resident of a cul-de-sac, in conducting his daily residential activities (mowing the lawn, going to / coming from work, playing croquet with his kids in the front yard, watching porn with the wife with the curtains open, etc.) is visible to all of his cul-de-sac neighbors. This is in contrast to a traditional street, where one's activities are visible primarily to the house on the other side of the street. In a cul-de-sac, a large amount of a resident's activities are visible to his fellow neighbors.

"Aha!" say those (mistaken) urban planners. "Cul-de-sacs are public spaces, because the visibility requirement is met!" What these planners forget, however, is that a public space has other requirements, including:

1. Heterogeneity of users. In a public space, there a variety of people visiting it. In a park, for instance, there are young couples, old couples, single people, families, homeless people, park employees, high school sports teams, musicians, gardeners, photographers, and so on. In a cul-de-sac, however, the vast majority of people using the cul-de-sac are the residents themselves (a small group of people at that).

2. Heterogeneity of uses. In addition to the variety of users of a public space, there are (logically enough) a variety of uses. Consider Crocker Park, an outdoor mall and frequent haunt of mine. There are retail uses (mostly clothing stores), entertainment (a movie theater), quasi-intellectual stimulation (a bookstore/cafe), and of course dining (plenty of restaurants). Also, there's outdoor space dedicated to lounging (lots of chairs & tables, along with several chess boards). In contrast, life on a cul-de-sac is decidedly residential in nature.

3. Conductivity. Lastly, a public space is not just a place for a variety of people to do a variety of things, it is also a place through which people pass on their way to other places (ok, that was a little awkwardly worded). More simply put, a public space allows people to pass through it. It is like a road, in this sense. Consider Market Square on Cleveland's West Side. This open-air space on the corner of Lorain and West 25th not only hosts a variety of events for a variety of users, but it also readily serves as a thoroughfare for pedestrian traffic around the neighborhood. Most importantly, cul-de-sacs lack this quality. Since cul-de-sacs are by their nature dead-ends in the road system, they cannot function as pass-throughs for non-residents.

Having babbled long enough on the subject, I'll try to wrap things up. My point is this: cul-de-sacs do indeed meet the first requirement of a public space (visibility), but they lack a suitable mix of users & uses, and by virtue of their layout cannot functions as conduits. The practical result is that while cul-de-sacs are pleasant to live on and command a premium in the housing market, they do not in fact constitute public places.

Thursday, August 24, 2006

Catalyzing Downtown Cleveland's Residential Growth

There has been a long-standing debate over how best to attract new residents to Cleveland's downtown. Potential residents clamor for more housing and more retail & services. Developers, for their part, hesitate to build more housing until there's more residents (paradoxically) and more retail & services. Retailers, of course, don't want to set up shop downtown until there are more residents. If all three groups play their part, then downtown should prosper (ie: potential residents commit to signing leases / buying condos; developers commit to building those apartment buildings; service/retail providers commit to opening stores). If, however, any one of the groups fails to honor its commitment, the project as a whole fails: if residents don't move in to the new homes, developers and retailers go out of business; if developers don't build the homes, residents can't move in and the retailers have no customers; if retailers don't open their new stores, residents won't be able to conveniently access essential services and won't move in to the neighborhood).

It's a rather compelling example of The Prisoner's Dilemma: the mission (in this case, building up a downtown neighborhood) succeeds only if all the players freely choose to do their part. Each player, however, has no assurance that his teammates will take the same risk and play their respective roles. It's an exercise in trust.

In simpler terms, the downtown growth question can be understood as a "chicken-and-egg" debate. Residents will only move in when there is sufficient housing & retail. Housing & retail only move in when there is sufficient residential population. Which comes first, the chicken (residents, I suppose) or the egg (housing & retail) ?

Regardless of which theoretical model you prefer, the practical result has been slow residential growth in the downtown core. If it really is a question of trust (or, shall we say, political consensus) among disparate actors, then we must conclude that there's a lot of mistrust.

All of which brings me to an article about a new development in Minneapolis. To quickly summarize: a developer (Don Milliken) has just gotten approval from the city's Planning Commission to build his proposed 33-story (290-unit) condo building downtown. This building will include a ground-level 75,000 square-foot Whole Foods. The project formally brings together exactly those three key groups necessary for downtown rebirth: residents, developers, and retailers! Whole Foods commits to opening a store in the condo building; the developer commits to building it; and residents (one hopes!) commit to moving in.

Well, to be fair, that last part is still unclear: the article does not discuss whether Milliken's financiers will demand a certain percentage of pre-building sales before ponying up the cash. My guess is that to secure $200 million in financing he will absolutely have to pre-sell at least a third of the building. Assuming that's the case, this project may well prove to be an excellent case study in how to bring together the three essential players in downtown growth.

Theoretically, this whole project could be a shining example to the rest of the country. Let's say Milliken pre-sells enough units; the banks in turn agree to finance the construction; Whole Foods agrees to set up shop (selling to a captive audience, no less); Milliken builds it; the contractors actually get it done on time (!); residents move in; and finally everyone wins: The city gets new property tax revenue, Whole Food makes a killing selling over-priced organic tomatoes to the condo crowd, and Milliken makes a fortune and contributes it all to the Gates foundation (well, who knows, right?).

On the other, we should consider how this could go wrong. The easiest way for the project to collapse is if Milliken can't pre-sell enough units. If the housing market isn't interested in downtown Minneapolis living, then there's little Milliken can do. In that event, the financing would fall through and the whole project would evaporate. Even if Milliken can pre-sell enough units, Whole Foods might decide that it's not good business to open up. And even if Whole Foods doesn't back out, there could easily be cost- and time-overruns in the construction process, delaying the move-in date for all those pre-sold residents and causing Whole Foods shareholders to complain that the company isn't expanding fast enough.

But I've said enough. Let's keep our eyes on this project and see if they can make the magic happen...

Wednesday, August 23, 2006

Housing in Cuyahoga County

The PD reports today that the Cuyahoga County Treasurer's Office will be helping out Shaker Heights with new home improvement loans. The County already has a program that offers qualified home-owners up to $200k in low-interest home improvement loans. This new program, however, specifically helps out Shaker Heights. The idea, if I've understood it right, goes like this: Shaker issues municipal bonds to fund home improvements; the County in turn buys those loans (effectively loaning Shaker the cash to fund the improvements). If all goes well, Shaker sees its housing stock improve and everybody wins.

Maintaining (and improving) housing stock appears to be a key tenet of economic development philosophy. I'm certainly willing to believe it--if quality-of-life begins in the home, it makes sense to support home improvement.

All of this got me thinking: what is the state of housing in Cuyahoga County? Let's consider the various ways to measure it...

Of course, there's quantity. In yesterday's PD we learn that the Census Bureau found only a 0.6% increase in the county's total housing stock. For comparison's sake, Delaware County reports a 34.5% increase. If you're really curious, you can see a snapshot (five years old, admittedly) of median house values in the County here. In light of this miniscule growth in housing units, should we conclude that Cuyahoga County is falling behind? Are more houses a sign of economic growth?

Conventional wisdom, appears, concludes that absolute growth (in housing, for instance) corresponds to economic growth. But I'm skeptical--what about other measures of economic output, such as productivity or income?

What about measuring housing density? As housing density increases, local populations may reach critical thresholds necessary to support local business. Such growth may also reach critical thresholds necessary for feasible mass transit. The growth in local business, as well as availability of mass transit, may in turn attract residents to a neighborhood. This scenario illustrates how a quantitative shift (in this case growth in housing density) can lead to a qualitative shift (the birth of a neighborhood and its higher quality-of-life). At this point, I would glad post a link to a map of the County's population density; unfortunately, I don't think the Census website lets you perform that specific search. Alas...

Anyway, my point is this: it's important to remember that measuring a region's housing stock is a complicated business. Besides the absolute number of homes, you have to take into account their quality (as the Treasurer's Office does!) as well as density.

Monday, August 21, 2006

Cavs Want In on Corporate Handouts

Well well well! The Cavaliers have joined the likes of Ford and OfficeMax by demanding public dollars to finance their for-profit business. The PD reports that Cavs officials met with city officials (including Commissioner Dimora) to present ideas for sprucing up Gund Arena (oops! I mean "The Q"). Though Cavs officials hesitated to name their price, County officials estimated the improvements (which will include "enhanc[ing] the fan experience and the arena's function") at $30 million.

Here's a quick review of who owns and operates what: The Gateway development corporation, funded by public bond funds from the county, owns The Q and Jacob's Field. Gateway, in turn, leases The Q to the Cavaliers. The Cavaliers, writes the PD, are 11 years into a 33-year lease.

So the Cavs want $30 million for arena improvements? For comparison's sake, let's consider how much taxpayers have already spent on building the Gateway complex to begin with! Take a look at this Schumann's link for a great brief history of the Gateway project; also see here for more. The long and short of it is that taxpayers spent around $150 million for original construction of The Q. Surely $150 million should be enough to satisfy any large-scale business seeking to operate in a major American city!

But in an era where sports teams feel perfectly free to demand huge public subsidies in exchange for the "locational loyalty" (see here, here, and here), I guess the Cavs demand isn't so outlandish. Maybe the city should consider throwing more dollars at the NBA team, given that the region's less important problems probably wouldn't even know what to do with a sudden infusion of a cool thirty million. Maybe the county treasury should simply be opened up for corporate raiders!

Or maybe we can finally say "No!" to the idea that the public budget's primary purpose is the subsidization of the private sector. If the Cavs really think their business merits improvements, they should issue corporate bonds, borrow on existing lines of credit, or raise ticket prices. In fact, I imagine there are a whole host of licensed financial advisors ready to help the Cavs solve their problem.

In the meantime, let's try not to let the public get squeezed even more so that Dan Gilbert can move up another tax bracket.

Wednesday, August 16, 2006

Cleveland Still Losing Population

With the 2005 American Community Survey recently published, the Plain Dealer has reported that Cleveland's population continues to drop. Despite former Mayor Campbell's 2003 initiative to boost the city past the 500,000 mark, it appears now that Cleveland is on track to drop below 400,000 residents by this time next year. The PD also notes the following trends:

Cleveland is "growing older and poorer, and sending fewer teens off to college as it becomes home to more single moms and fewer nuclear families."

Cleveland lost 11% of its population in the period from 2000 to 2005.

People are moving out of Cleveland and into the surrounding suburbs.

White residents left Cleveland in greater numbers than black residents.

The future is potentially grim for Cleveland. If middle-class residents continue to flee the city, Cleveland's income tax base will erode. The departure of middle-class residents will in turn lead to a decline in housing valuations and consequently property tax revenues. The schools, funded primarily by those declining property taxes, will also suffer. And, as a final step in the feedback loop, the declining schools will further encourage middle-class flight. This potential chain of events begs the question: are there any workable options available to the city at this point?

There are indeed solutions, though they will not be easy. Cleveland needs to attack its problems in two ways: (1) increase revenue through redistributive methods, and (2) increase revenue by creating new economic value in the city.

The first solution--redistribution of funds--is likely the more familiar solution for most readers. The basic idea is that if Cleveland doesn't have enough money, it seeks to get more money from outside sources. This includes most notably the state, which underfunds Ohio's urban schools. Campbell acknowledged the issue in one of the Campbell-Jackson debates, but there has been little progress on the matter. Cleveland needs to redouble its efforts in getting the state legislature to better fund its urban schools. This crisis in funding comes at time when Cleveland's schools have made admirable progress. Other fund redistribution can come from the county (via regionalization of cities' services), and (though it pains me to say it) raising its income tax (a large portion of which is paid by middle-class suburbanites who work in Cleveland).

The second solution--creating new economic value--is a difficult one. It is also necessary, because Cleveland cannot simply reverse its economic fortunes by redistribution alone. Cleveland needs to get started implementing some of the solid, revenue-generating ideas that has been proposed over the years. The Lakefront Plan, for instance, has been hotly debated, but no real lasting consensus ever formed. The lack of quality housing in University Circle often gains attention, but with the firing of CWRU President Hundert the issue has lost one of most powerful backers; it remains to be seen whether remaining supporters of UCI development (such as Ronayne) have sufficient political power to break ground on this project. And ODOT's inner belt reconstruction promises to open up a lot more land for development downtown, but political wrangling has slowed its progress. Each one of those ideas promises great new revenues for the city, and each has been stymied by competing political interests.

If Cleveland can't get its act together on both these fronts, its economy will continue to slide. Its population will decline further, as will city revenues. Eventually, Cleveland could become a nationally recognized sinkhole of poverty. If, however, Clevelanders can agree to act on a plan for redistributing funds *and* for implementing new revenue-generating projects, there is some hope. By lobbying the state, county, and neighboring suburbs, Cleveland could potentially bring in more money. By actually implementing some of the very good development ideas, Cleveland stands to create new economic (and taxable!) value within its borders. If Cleveland can successfully employ both tactics, it stands a chance at reversing its decline.